The Oregon Caregiver Fall/Winter 2016

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The Oregon Caregiver Fall/Winter 2016 14
public policy
The Oregon Legislature will face
either feast or famine when the
2017 legislative session convenes
in January to write the state budget for
the upcoming 2017–19 biennium. The
current projection is for general fund
revenues to be approximately $1.5 billion
less than the cost of continuing existing
state-funded programs and services.
However, if Oregon voters approve Ballot
Measure 97 this November, the state
general fund could see an estimated
$6 billion in additional revenue—a
roughly 30 percent increase in state
general fund revenues. Ballot Measure
97 would impose a 2.5 percent tax on
all goods or services sold in Oregon by
companies registered as C corporations.
The first $25 million of Oregon sales
would be exempt from the tax.
Any measure that raises such a large
amount of new revenue is bound to be
controversial, and Measure 97 is no
exception. The measure was crafted and
put on the ballot primarily by labor
unions. They argue that the tax will be
paid by large, out of state corporations
who are not currently paying their fair
share of state taxes. They also argue that
the additional revenue will help fund,
and will keep the state from defunding,
public services such as education, health
care, and senior services.
Opponents of the measure counter that
the tax is regressive because it will be
passed on to consumers in the form of
higher prices for food, clothes, consumer
goods, utilities, prescription drugs,
insurance, etc. They also argue that the
measure will stifle investment and make
Oregon a less desirable state to locate a
business.
Both sides are spending millions of dollars
to convince voters that their arguments
are correct. The OHCA Board of Directors
heard a presentation from the Legislative
Revenue Office, a nonpartisan office who
recently conducted an analysis of the
measure’s impact. After the presentation,
the Board chose to remain neutral on the
measure.
The projected deficit in the state budget
is largely a result of two cost drivers: the
exploding cost of the Public Employee
Retirement System (PERS) and Medicaid
expansion under the Affordable Care
Act. PERS is now underfunded by $21.5
billion. For now, the state’s solution to
this has been to require public employers
to pay more into the system, which
reduces the funds available to support
current programs and services.
Some lawmakers are calling on the
Legislature to enact a new round of PERS
reforms. This seems unlikely, however,
because there are few, if any, options that
are legal, politically viable, and could
save significant amounts of money in the
near future.
The Affordable Care Act requires states
to pick up an increasing share of the cost
of Medicaid expansion. The state match
will grow to 7 percent this biennium.
Combined with the loss of one time
Federal funds, the state will have an
increased obligation of 100’s of millions
of dollars.
The Legislature also passed a new
minimum wage law in 2015 that will
increase labor costs for the state and
those who contract with the state to
provide essential services. OHCA will
be asking the Legislature to make good
on its commitment to fund this raise for
caregivers and other workers through
increased Medicaid reimbursement rates.
These budget challenges become much
more manageable if Ballot Measure 97
passes. However, there could also be
increased costs in the form of higher
prices for the goods (food, medical
supplies, utilities, construction, etc) and
services (insurance) that long term care
providers purchase every day. 
Phil Bentley, J.D., is the Senior VP for Government Relations
at OHCA.
The State Budget
Landscape
By Phil Bentley, Oregon Health Care Association